- Pound (GBP) falls after modest gains last week
- BiE Hue Pill will speak
- Euro (EUR) rises ahead of ECB Christine Lagrde’s speech
- Eurozone inflation data is due on Friday
The Pound Euro (GBP/EUR) exchange rate is falling after small gains last week. The pair rose 0.17% in the previous week, settling on Friday at €1.1709 and trading in a range between €1.1656 – €1.1700. At 11:00 UTC, GBP/EUR trades -0.011% at €1.1697.
After modest gains last week, the pound is inching lower in a quiet start to the new week. The pound rose last week after data suggested that the recession in the UK could be short-lived. The service sector PMI came in stronger than expected, which means that service inflation could remain sticky.
Meanwhile, with inflation in the UK still doubling, the Bank of England’s target policy so policymakers remain cautious about when the first rate cut could be.
The Bank of England’s chief economist, Hue Pill, is due to speak today, and investors will be watching closely for any clues over the future path for interest rates.
While there is no high-impacting UK economic data today, figures from recruitment firm Adzuna showed that British firms advertised the fewest jobs in three months last now month, down 15% from a year ago.
The UK jobs market has remained resilient despite the UK economy entering a shallow recession in the second half of last year. The jobless rate has remained at 3.8% which is considered full employment. However the central bank has said that it wants to see wage growth slow from its current 6% level in order to put a downward pressure on inflation.
Looking ahead, this week is another quiet week For UK economic data.
The euro is inching higher ahead of a speech from ECB president Christine Lagarde. Investors will be watching closely for clues over when the ECB could start to cut interest rates.
Eurozone inflation data on Friday will be a key focus and, as expected, cooled to 2.5% from 2.8%. Yet despite inflation cooling and the eurozone economy remaining in a downturn, the ECB is reluctant to talk about cutting interest rates, keeping the euro supported.
